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91_SB0815eng SB815 Engrossed LRB9105966JSpcA 1 AN ACT to amend the Illinois Banking Act by changing 2 Sections 4, 13, 22, 30, and 30.5. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Banking Act is amended by 6 changing Sections 4, 13, 22, 30, and 30.5 as follows: 7 (205 ILCS 5/4) (from Ch. 17, par. 310) 8 Sec. 4. Effect on existing banks. The certificates, 9 permits and charters of state banks existing at the time of 10 the adoption of this Act shall continue in full force and 11 effect, and the provisions of this Act shall apply thereto. 12 Any corporation with banking powers availing itself of or 13 accepting the benefits of this Act and all corporations with 14 banking powers existing by virtue of any special charter or 15 general law of this State, shall be subject to the 16 restrictionsprovisionsand requirements of this Act in every 17 particular, as if organized under this Act. 18 (Source: Laws 1955, p. 83.) 19 (205 ILCS 5/13) (from Ch. 17, par. 320) 20 Sec. 13. Issuance of charter. 21 (a) When the directors have organized as provided in 22 Section 12 of this Act, and the capital stock and the 23 preferred stock, if any, together with a surplus of not less 24 than 50% of the capital, has been all fully paid in and a 25 record of the same filed with the Commissioner, the 26 Commissioner or some competent person of the Commissioner's 27 appointment shall make a thorough examination into the 28 affairs of the proposed bank, and if satisfied (i) that all 29 the requirements of this Act have been complied with, (ii) 30 that no intervening circumstance has occurred to change the SB815 Engrossed -2- LRB9105966JSpcA 1 Commissioner's findings made pursuant to Section 10 of this 2 Act, and (iii) that the prior involvement by any stockholder 3 who will own a sufficient amount of stock to have control, as 4 defined in Section 18 of this Act, of the proposed bank with 5 any other financial institution, whether as stockholder, 6 director, officer, or customer, was conducted in a safe and 7 sound manner, upon payment into the Commissioner's office of 8 the reasonable expenses of the examination, as determined by 9 the Commissioner, the Commissioner shall issue a charter 10 authorizing the bank to commence business as authorized in 11 this Act. All charters issued by the Commissioner or any 12 predecessor agency which chartered State banks, including any 13 charter outstanding as of September 1, 1989, shall be 14 perpetual. For the 2 years after the Commissioner has issued 15 a charter to a bank, the bank shall request and obtain from 16 the Commissioner prior written approval before it may change 17 senior management personnel or directors. 18 The original charter, duly certified by the Commissioner, 19 or a certified copy shall be evidence in all courts and 20 places of the existence and authority of the bank to do 21 business. Upon the issuance of the charter by the 22 Commissioner, the bank shall be deemed fully organized and 23 may proceed to do business. The Commissioner may, in the 24 Commissioner's discretion, withhold the issuing of the 25 charter when the Commissioner has reason to believe that the 26 bank is organized for any purpose other than that 27 contemplated by this Act or that a commission or fee has been 28 paid in connection with the sale of the stock of the bank. 29 The Commissioner shall revoke the charter and order 30 liquidation in the event that the bank does not commence a 31 general banking business within one year from the date of the 32 issuance of the charter, unless a request has been submitted, 33 in writing, to the Commissioner for an extension and the 34 request has been approved. After commencing a general SB815 Engrossed -3- LRB9105966JSpcA 1 banking business, a bank, upon written notice to the 2 Commissioner, may change its name. 3 (b) (1) The Commissioner may also issue a charter to a 4 bank that is owned exclusively by other depository 5 institutions or depository institution holding companies and 6 is organized to engage exclusively in providing services to 7 or for other depository institutions, their holding 8 companies, and the officers, directors, and employees of such 9 institutions and companies, and in providing correspondent 10 banking services at the request of other depository 11 institutions or their holding companies (also referred to as 12 a "bankers' bank"). 13 (2) A bank chartered pursuant to paragraph (1) shall, 14 except as otherwise specifically determined by the 15 Commissioner, be vested with the same rights and privileges 16 and subject to the same duties, restrictions, penalties, and 17 liabilities now or hereafter imposed under this Act. 18 (c) A bank chartered under this Act after November 1, 19 1985, and an out-of-state bank that merges with a State bank 20 and establishes or maintains a branch in this State after May 21 31, 1997, that accepts deposits or that is authorized to 22 accept deposits shall obtain from and, at all times while it 23 accepts or retains deposits, maintain with the Federal 24 Deposit Insurance Corporation, or such other instrumentality 25 of or corporation chartered by the United States, deposit 26 insurance as authorized under federal law. 27 (d) (i) A bank that has a banking charter issued by the 28 Commissioner under this Act may, pursuant to a written 29 purchase and assumption agreement, transfer substantially all 30 of its assets to another State bank or national bank in 31 consideration, in whole or in part, for the transferee banks' 32 assumption of any part or all of its liabilities. Such a 33 transfer shall in no way be deemed to impair the charter of 34 the transferor bank or cause the transferor bank to forfeit SB815 Engrossed -4- LRB9105966JSpcA 1 any of its rights, powers, interests, franchises, or 2 privileges as a State bank, nor shall any voluntary reduction 3 in the transferor bank's activities resulting from the 4 transfer have any such effect; provided, however, that a 5 State bank that transfers substantially all of its assets 6 pursuant to this subsection (d) and following the transfer 7 does not accept deposits and make loans, shall not have any 8 rights, powers, interests, franchises, or privileges under 9 subsection (15) of Section 5 of this Act until the bank has 10 resumed accepting deposits and making loans. 11 (ii) The fact that a State bank does not resume 12 accepting deposits and making loans for a period of 24 months 13 commencing on September 11, 1989 or on a date of the transfer 14 of substantially all of a State bank's assets, whichever is 15 later, or such longer period as the Commissioner may allow in 16 writing, may be the basis for a finding by the Commissioner 17 under Section 51 of this Act that the bank is unable to 18 continue operations. 19 (iii) The authority provided by subdivision (i) of this 20 subsection (d) shall terminate on May 31, 1997, and no bank 21 that has transferred substantially all of its assets pursuant 22 to this subsection (d) shall continue in existence after May 23 31, 1997. 24 (Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96; 25 89-603, eff. 8-2-96; 90-14, eff. 7-1-97; 90-301, eff. 8-1-97; 26 90-665, eff. 7-30-98.) 27 (205 ILCS 5/22) (from Ch. 17, par. 329) 28 Sec. 22. Merger procedure; resulting State bank. The 29 merger procedure required of a State bank where there is to 30 be a resulting State bank by consolidation or merger shall 31 be: 32 (1) The board of directors of each merging bank or 33 insured savings association shall, by a majority of the SB815 Engrossed -5- LRB9105966JSpcA 1 entire board, approve a merger agreement that shall contain: 2 (a) The name of each merging bank or insured 3 savings association and its location and a list of each 4 merging bank's or insured savings association's 5 stockholders as of the date of the merger agreement; 6 (b) With respect to the resulting bank (i) its name 7 and place of business; (ii) the amount of capital and,8 surplusand reserve for operating expenses; (iii) the 9 classes and the number of shares of stock and the par 10 value of each share; (iv) the designation of the 11 continuing bank and the charter which is to be the 12 charter of the resulting bank, together with the 13 amendments to the continuing charter and to the 14 continuing by-laws; and (v) a detailed financial 15 Statement showing the assets and liabilities after the 16 proposed merger or consolidation; 17 (c) Provisions stating the method, terms and 18 conditions of carrying the merger into effect, including 19 the manner of converting the shares of the merging banks 20 or insured savings association into the cash, shares of 21 stock or other securities of any corporation or other 22 property, or any combination of the foregoing, Stated in 23 the merger agreement as to be received by the 24 stockholders of each merging bank or insured savings 25 association; 26 (d) A Statement that the agreement is subject to 27 approval by the Commissioner and by the stockholders of 28 each merging bank or insured savings association and that 29 whether approved or disapproved the merging banks or 30 insured savings association will pay the Commissioner's 31 expenses of examination; 32 (e) Provisions governing the manner of disposing of 33 the shares of the resulting bank not taken by the 34 dissenting stockholders of the merging banks or insured SB815 Engrossed -6- LRB9105966JSpcA 1 savings association; and 2 (f) Such other provisions as the Commissioner may 3 reasonably require to enable him to discharge his duties 4 with respect to the merger. 5 (2) After approval by the board of directors of each 6 bank or insured savings association, the merger agreement 7 shall be submitted to the Commissioner for approval, together 8 with certified copies of the authorizing resolutions of each 9 board of directors showing approval by a majority of the 10 entire board of each bank or insured savings association. 11 (3) After receipt by the Commissioner of the papers 12 specified in paragraph (2), he shall approve or disapprove 13 the merger agreement. The Commissioner shall not approve the 14 merger agreement unless he shall be of the opinion and shall 15 find: 16 (a) That the resulting bank meets the requirements 17 of this Act for the formation of a new bank at the 18 proposed main banking premises of the resulting bank; 19 (b) That the same matters exist with respect to the 20 resulting bank which would have been required under 21 Section 10 of this Act for the organization of a new 22 bank; 23 (c) That the merger agreement is fair to all 24 persons affected; and 25 (d) That the resulting bank will be operated in a 26 safe and sound manner. 27 If the Commissioner disapproves an agreement he shall 28 State his objections and give an opportunity to the merging 29 banks to amend the merger agreement to obviate such 30 objections. 31 (Source: P.A. 87-1226.) 32 (205 ILCS 5/30) (from Ch. 17, par. 337) 33 Sec. 30. Conversion; merger with trust company. Upon SB815 Engrossed -7- LRB9105966JSpcA 1 approval by the Commissioner a trust company having power so 2 to do under the law under which it is organized may convert 3 into a state bank or may merge into a state bank as 4 prescribed by this Act; except that the action by a trust 5 company shall be taken in the manner prescribed by and shall 6 be subject to limitations and requirements imposed by the law 7 under which it is organized which law shall also govern the 8 rights of its dissenting stockholders. The rights of 9 dissenting stockholders of a state bank shall be governed by 10 Section 29 of this Act. The conversion or merger procedure 11 shall be: 12 (1) In the case of a merger, the board of directors of 13 both the merging trust company and the merging bank by a 14 majority of the entire board in each case shall approve a 15 merger agreement which shall contain: 16 (a) The name and location of the merging bank and 17 of the merging trust company and a list of the 18 stockholders of each as of the date of the merger 19 agreement; 20 (b) With respect to the resulting bank (i) its name 21 and place of business; (ii) the amount of capital and,22 surplusand reserve for operating expenses; (iii) the 23 classes and the number of shares of stock and the par 24 value of each share; (iv) the charter which is to be the 25 charter of the resulting bank, together with the 26 amendments to the continuing charter and to the 27 continuing by-laws; and (v) a detailed financial 28 statement showing the assets and liabilities after the 29 proposed merger; 30 (c) Provisions governing the manner of converting 31 the shares of the merging bank and of the merging trust 32 company into shares of the resulting bank; 33 (d) A statement that the merger agreement is 34 subject to approval by the Commissioner and by the SB815 Engrossed -8- LRB9105966JSpcA 1 stockholders of the merging bank and the merging trust 2 company, and that whether approved or disapproved, the 3 parties thereto will pay the Commissioner's expenses of 4 examination; 5 (e) Provisions governing the manner of disposing of 6 the shares of the resulting bank not taken by the 7 dissenting stockholders of the merging trust company; and 8 (f) Such other provisions as the Commissioner may 9 reasonably require to enable him to discharge his duties 10 with respect to the merger. 11 (2) After approval by the board of directors of the 12 merging bank and of the merging trust company, the merger 13 agreement shall be submitted to the Commissioner for approval 14 together with the certified copies of the authorizing 15 resolution of each board of directors showing approval by a 16 majority of each board. 17 (3) After receipt by the Commissioner of the papers 18 specified in subsection (2), he shall approve or disapprove 19 the merger agreement. The Commissioner shall not approve the 20 agreement unless he shall be of the opinion and finds: 21 (a) That the resulting bank meets the requirements 22 of this Act for the formation of a new bank at the 23 proposed place of business of the resulting bank; 24 (b) That the same matters exist in respect of the 25 resulting bank which would have been required under 26 Section 10 of this Act for the organization of a new 27 bank; and 28 (c) That the merger agreement is fair to all 29 persons affected. If the Commissioner disapproves the 30 merger agreement, he shall state his objections in 31 writing and give an opportunity to the merging bank and 32 the merging trust company to obviate such objections. 33 (4) To be effective, if approved by the Commissioner, a 34 merger of a bank and a trust company where there is to be a SB815 Engrossed -9- LRB9105966JSpcA 1 resulting bank must be approved by the affirmative vote of 2 the holders of at least two-thirds of the outstanding shares 3 of stock of the merging bank entitled to vote at a meeting 4 called to consider such action, unless holders of preferred 5 stock are entitled to vote as a class in respect thereof, in 6 which event the proposed merger shall be adopted upon 7 receiving the affirmative vote of the holders of at least 8 two-thirds of the outstanding shares of each class of shares 9 entitled to vote as a class in respect thereof and of the 10 total outstanding shares entitled to vote at such meeting and 11 must be approved by the stockholders of the merging trust 12 company as provided by the Act under which it is organized. 13 The prescribed vote by the merging bank and the merging trust 14 company shall constitute the adoption of the charter and 15 by-laws of the continuing bank, including the amendments in 16 the merger agreement, as the charter and by-laws of the 17 resulting bank. Written or printed notice of the meeting of 18 the stockholders of the merging bank shall be given to each 19 stockholder of record entitled to vote at such meeting at 20 least thirty days before such meeting and in the manner 21 provided in this Act for the giving of notice of meetings of 22 stockholders. The notice shall state that dissenting 23 stockholders of the merging trust company will be entitled to 24 payment of the value of those shares which are voted against 25 approval of the merger, if a proper demand is made on the 26 resulting bank and the requirements of the Act under which 27 the merging trust company is organized are satisfied.;28 (5) Unless a later date is specified in the merger 29 agreement, the merger shall become effective upon the filing 30 with the Commissioner of the executed merger agreement, 31 together with copies of the resolutions of the stockholders 32 of the merging bank and the merging trust company approving 33 it, certified by the president or a vice-president or, the 34 cashier and also by the secretary or other officer charged SB815 Engrossed -10- LRB9105966JSpcA 1 with keeping the records. The charter of the merging trust 2 company shall thereupon automatically terminate. The 3 Commissioner shall thereupon issue to the continuing bank a 4 certificate of merger which shall specify the name of the 5 merging trust company, the name of the continuing bank and 6 the amendments to the charter of the continuing bank provided 7 for by the merger agreement. Such certificate shall be 8 conclusive evidence of the merger and of the correctness of 9 all proceedings therefor in all courts and places including 10 the office of the Secretary of State, and said certificate 11 shall be recorded. 12 (6) In the case of a conversion, a trust company shall 13 apply for a charter by filing with the Commissioner: 14 (a) A certificate signed by its president, or a 15 vice-president, and by a majority of the entire board of 16 directors setting forth the corporate action taken in 17 compliance with the provisions of the Act under which it 18 is organized governing the conversion of a trust company 19 to a bank or governing the merger of a trust company into 20 another corporation; 21 (b) The plan of conversion and the proposed 22 charter approved by the stockholders for the operation of 23 the trust company as a bank. The plan of conversion shall 24 contain (i) the name and location proposed for the 25 converting trust company; (ii) a list of its stockholders 26 as of the date of the stockholders' approval of the plan 27 of conversion; (iii) the amount of its capital and,28 surplusand reserve for operating expenses; (iv) the 29 classes and the number of shares of stock and the par 30 value of each share; (v) the charter which is to be the 31 charter of the resulting bank; and (vi) a detailed 32 financial statement showing the assets and liabilities of 33 the converting trust company; 34 (c) A statement that the plan of conversion is SB815 Engrossed -11- LRB9105966JSpcA 1 subject to approval by the Commissioner and that, whether 2 approved or disapproved, the converting trust company 3 will pay the Commissioner's expenses of examination; and 4 (d) Such other instruments as the Commissioner may 5 reasonably require to enable him to discharge his duties 6 with respect to the conversion. 7 (7) After receipt by the Commissioner of the papers 8 specified in subsection (6), he shall approve or disapprove 9 the plan of conversion. The Commissioner shall not approve 10 the plan of conversion unless he shall be of the opinion and 11 finds: 12 (a) That the resulting bank meets the requirements 13 of this Act for the formation of a new bank at the 14 proposed place of business of the resulting bank; 15 (b) That the same matters exist in respect of the 16 resulting bank which would have been required under 17 Section 10 of this Act for the organization of a new 18 bank; and 19 (c) That the plan of conversion is fair to all 20 persons affected. 21 If the commissioner disapproves the plan of conversion, 22 he shall state his objections in writing and give an 23 opportunity to the converting trust company to obviate such 24 objections. 25 (8) Unless a later date is specified in the plan of 26 conversion, the conversion shall become effective upon the 27 Commissioner's approval, and the charter proposed in the plan 28 of conversion shall constitute the charter of the resulting 29 bank. The Commissioner shall issue a certificate of 30 conversion which shall specify the name of the converting 31 trust company, the name of the resulting bank and the charter 32 provided for by said plan of conversion. Such certificate 33 shall be conclusive evidence of the conversion and of the 34 correctness of all proceedings therefor in all courts and SB815 Engrossed -12- LRB9105966JSpcA 1 places including the office of the Secretary of State, and 2 such certificate shall be recorded. 3 (9) In the case of either a merger or a conversion under 4 this Section 30, the resulting bank shall be considered the 5 same business and corporate entity as each merging bank and 6 merging trust company or as the converting trust company with 7 all the property, rights, powers, duties and obligations of 8 each as specified in Section 28 of this Act. 9 (Source: P.A. 89-541, eff. 7-19-96; revised 10-31-98.) 10 (205 ILCS 5/30.5) 11 Sec. 30.5. Mid-tier bank holding company merger with 12 State bank. Upon approval by the Commissioner, a mid-tier 13 bank holding company having power so to do under the law 14 under which it is organized may merge into its subsidiary 15 State bank as prescribed by this Act; except that the action 16 by the mid-tier bank holding company shall be taken in the 17 manner prescribed by and shall be subject to limitations and 18 requirements imposed by the law under which it is organized. 19 The merger procedure shall be as follows: 20 (1) The board of directors of the parent bank holding 21 company shall, by resolution, approve a merger agreement 22 which shall contain: 23 (a) the name and location of the merging bank and 24 of the mid-tier bank holding company; 25 (b) with respect to the merging bank (i) the amount 26 of capital and,surplus, and reserve for operating27expenses; (ii) the classes and the number of shares of 28 stock and the par value of each share; (iii) a detailed 29 financial statement showing the assets and liabilities 30 after the proposed merger; and (iv) any amendments to the 31 charter or by-laws; 32 (c) provisions governing the manner of converting 33 the shares of the merging bank and the mid-tier bank SB815 Engrossed -13- LRB9105966JSpcA 1 holding company into shares of the merging bank and the 2 manner of transferring the converted shares to the parent 3 bank holding company; 4 (d) a statement that the merger agreement is 5 subject to approval by the Commissioner and that whether 6 approved or disapproved, the parties thereto will pay the 7 Commissioner's expenses of examination; and 8 (e) such other provisions as the Commissioner may 9 reasonably require to enable him to discharge his duties 10 with respect to the merger. 11 (2) After approval by the board of directors of the 12 parent bank holding company, the merger agreement shall be 13 submitted to the Commissioner for approval. 14 (3) After receipt by the Commissioner of the papers 15 specified in item (2), he shall approve or disapprove the 16 merger agreement. The Commissioner shall not approve the 17 agreement unless he shall be of the opinion and finds that 18 the same matters exist in respect of the continuing bank 19 which would have been required under Section 10 of this Act 20 for the organization of a new bank, that the mid-tier bank 21 holding company has no known liabilities that will become 22 liabilities of the continuing bank, and that the parent bank 23 holding company will indemnify the continuing bank for any 24 known and unknown contingent liabilities for which the 25 continuing bank may become liable as a result of the merger. 26 Nothing in this Section shall authorize a resulting State 27 bank to acquire, hold, or invest any asset or to assume or 28 incur any liability that does not conform to the legal 29 requirements for assets acquired, held, or invested or 30 liabilities assumed or incurred by State banks, or to engage 31 in any activity in which a State bank is not authorized to 32 engage as part of a general banking business. If the 33 Commissioner disapproves the merger agreement, he shall state 34 his objections in writing and give an opportunity to the SB815 Engrossed -14- LRB9105966JSpcA 1 merging bank and mid-tier bank holding company to obviate the 2 objections. 3 (4) To be effective, if approved by the Commissioner, a 4 copy of the merger agreement executed by the duly authorized 5 president of the mid-tier bank holding company and president 6 of the merging State bank, together with copies of the 7 resolution of the board of directors of the parent bank 8 holding company, approving the merger agreement, certified by 9 the parent bank holding company's president or vice-president 10 and attested by the secretary, must be filed with the 11 Commissioner. The merger shall, unless a later date is 12 specified in the agreement, become effective when the 13 Commissioner has approved the agreement and issued a 14 certificate of merger to the continuing bank, which shall 15 specify the name of the mid-tier bank holding company, the 16 name of the continuing bank, and the amendments to the 17 charter of the continuing bank provided for by the merger 18 agreement. The charter of the mid-tier bank holding company 19 shall thereupon automatically terminate. Such certificate 20 shall be conclusive evidence of the merger and of the 21 correctness of all proceedings therefor in all courts and 22 places including the office of the Secretary of State, and 23 the certificate shall be recorded. 24 (Source: P.A. 89-364, eff. 8-18-95.)